American Clean Energy and Security Act: What Business Leaders Need to Know

It’s been an exciting week as commentaries on the merits and shortcomings of the American Clean Energy and Security Act have taken place among the sustainability and business leadership communities. If enacted, this legislation could propel the US into an entirely new economy comprised of clean energy technologies & infrastructure, reduced greenhouse gas emissions across industries, and an innovative green jobs workforce.
If passed, this bill will certainly change the manners in which we do business and the costs of doing so. Forward thinking business leaders are staying ahead of the curve and preparing their businesses for the upcoming changes by closely following the development of this critical legislation.

The goal of this article is to provide business leaders with an overview of the American Clean Energy and Security Act and to highlight the aspects of the bill that may significantly change how you do business in the very near future. In addition to understanding the details of this proposed legislation, business leaders are encouraged to be informed of the details surrounding the debate of a carbon tax versus cap-and-trade.
American Clean Energy and Security Act of 2009 Discussion Draft Full Text
American Clean Energy and Security Act of 2009 Discussion Draft Summary
Opening Commentary:
The focus of much debate surrounding the draft version of this bill is centered on questions of: 1) the efficacy of a cap and trade system on affecting emissions reductions and 2) the impact of a cap and trade regime on company profits and consumer prices.
A key issue that the draft does not address is how the allowances for tradable emissions will be allocated across and within industries. This issue will be refined through upcoming conversations among Committee members. Although the resolution of this issue may not affect the overall cost of implementing the cap and trade program, it will certainly affect the finances of businesses as some businesses may now be facing potentially very large fines for exceeding allowable emissions counts as early as 2012.
In addition to being quiet on the details of how the allowable emissions will be allocated, the legislation also avoids laying out the details of consumer price protection strategies that it refers to in the “transitioning” title portion of the legislation.
A final point of note is that although the bill articulates that the cap and trade regime is for businesses emitting more than 25,000 tons of GHGs, businesses that emit less are not free of regulation. Instead, the emissions reductions from these companies will be regulated directly by the EPA. Government rebates will be awarded to high energy consuming industries as a means of enabling them to remain competitive in domestic and foreign markets. However no U.S. businesses are off the hook with regards to emissions regulation through this bill.
Overview: On March 31, 2009, the American Clean Energy and Security Act was introduced as a discussion draft into the House Committee on Energy and Commerce. Also known as “The Waxman-Markey Bill”, the discussion draft was authored by Representatives Henry Waxman (California) and Edward Markey (Massachusetts).
The discussion draft represents a comprehensive piece of energy legislation that aims to create millions of new clean energy jobs, save consumers hundreds of billions of dollars in energy costs, enhance America’s energy independence and cut global warming pollution.
Goals: The draft legislation aspires to reduce greenhouse gas (GHG) emissions by 20% of 2005 levels by 2020. It is worth noting that this target is substantially more aggressive than President Obama’s goal of a 14% reduction by 2020.
Framework: The discussion draft is organized into four titles:
* Clean energy – Promotes of renewable sources of energy, technologies for carbon capture and sequestration, low-carbon fuels, clean electric vehicles and smart grid technologies & infrastructure.
* Energy Efficiency – Increases energy efficiency throughout activities such as buildings, appliances, transportation and industry.
* Global Warming – Places limits on the allowable amount of emissions of GHG’s.
* Transitioning – Safeguards U.S. companies and consumers and advances green jobs during the shift to a clean energy economy.
Schedule: The House Energy and Commerce Committee will complete deliberation on the legislation by May 25th. The preliminary schedule for completing the House consideration is as follows:
Week of April 20: Energy and Environment Subcommittee Hearings
Week of April 27: Energy and Environment Subcommittee Markup Period Begins
Week of May 11: Full Energy and Commerce Committee Markup Period Begins

David received his undergraduate degree in Geographic Information Sciences from James Madison University and completed an M.A. in International Development at Clark University. With over 10 years of experience in the field of environmental sustainability, David has worked for organizations such as Environmental Defense Fund, USDA, USGS and the Smithsonian Institute.Currently, David is a NetImpact member and an MBA candidate at the Presidio School of Management where his research focus is on developing market incentives for investment in environmental sustainability.

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